Predict To Prosper In Digital Experience Rowan Curran, Researcher June 16, 2015

© 2015 Forrester Research, Inc. Reproduction Prohibited3 Image source: Associated Press (AP.org), photo by Michael Sohn The mobile mind shift The expectation that I can get what I want in my immediate context and moments of need

We need to deliver personalized experiences to this customer

UK teleco combined customer records, geospatial analysis, and train scheduling to identify high-value customers.

© 2015 Forrester Research, Inc. Reproduction Prohibited7 Google Now takes contextual details to deliver in-the-moment content

© 2015 Forrester Research, Inc. Reproduction Prohibited8 Many sites, many devices, many apps Base: 135 digital experience delivery decision-makers Source: 2015 Digital Experience Delivery Online Survey

© 2015 Forrester Research, Inc. Reproduction Prohibited9 The need for content in context drives the biggest tech investments Base: 135 digital experience delivery decision-makers Source: 2015 Digital Experience Delivery Online Survey

© 2015 Forrester Research, Inc. Reproduction Prohibited10 Big business technology budgets are here! Source: October 14, 2014, “Sizing The US CIO’s Business Technology Agenda” Forrester report

© 2015 Forrester Research, Inc. Reproduction Prohibited11 Digital experiences feed mobile mindshifts Software to manage, deliver, and optimize experiences consistently across every digital touchpoint.

© 2015 Forrester Research, Inc. Reproduction Prohibited12 In the age of the customer, we gather massive amounts of data Behavioral data Social data Mobile data Environmental data Sensor data Transaction data Customer data Third-party data Financial data Sales data Product data

© 2015 Forrester Research, Inc. Reproduction Prohibited13 Feeding all types of analytics PastPresentFuture Learn Decide Anticipate Predictive Analytics Real-time Analytics Descriptive Analytics

© 2015 Forrester Research, Inc. Reproduction Prohibited14 Predicting The Future For Contextual Experiences

Descriptive analytics stick you in the past.

Predictive reveals tomorrow...

... to make the right decisions today.

© 2015 Forrester Research, Inc. Reproduction Prohibited18 y = f(x) Predicted outcome Prediction function Input variables A function that takes input variables, applies a formula and/or rules to predict an outcome.

Relationships Finances Devices Attributes History Predict characteristics, likely behaviors, likes, and needs. Customer

Behavior Channe l Weathe r Location Time Use in-the-moment context to predict next-best-action. Customer

© 2015 Forrester Research, Inc. Reproduction Prohibited21 Ways to create predictive models › Handcraft business rules or program code to create a predictive model based on human experts. › Use predictive analytics tools to build models that analyze data with statistical and machine learning algorithms to create a predictive model.

© 2015 Forrester Research, Inc. Reproduction Prohibited22 Types of predictive models › Classifiers Predict a specific event, characteristic, or behavior › Recommenders Make a recommendation › Clusters Find groups that share common characteristics › Numerical, time series forecasting Predict a numerical value

Predictive models can have a delightful, multiplicative effect on the bottom line Direct Marketing – 1% response rate Send marketing mail to 1,000,000 customers at cost of $2 per mailing to sell a $220 service. $2 x 1,000,000$2,000,000 1% response rate means 10,000 customer will buy service $220 x 10,000$2,200,000 Profit*$200,000 Predictive Direct Marketing – 3% response rate Send marketing mail to 250,000 customers predicted most likely to buy at cost of $2 per mailing to sell a $220 service $2 x 250,000$500,000 3% response rate means 7,500 customer will buy service $220 x 7,500$1,650,000 Profit when using a predictive model*$1,150,000 Traditional Predictive * Profit calculation does not include other expenses

© 2015 Forrester Research, Inc. Reproduction Prohibited24 “We are drowning in data and starving for insight.” — Global Bank

© 2015 Forrester Research, Inc. Reproduction Prohibited25 A flood of data, a trickle of insights Insights for lines of business: Source: October 16, 2014, “The Customer-Activated Enterprise” Forrester report

© 2015 Forrester Research, Inc. Reproduction Prohibited26 Customers deserve a great experience across their entire journey These get attention These deserve more attention

Source: “Digital Insight Is The New Currency Of Business” Forrester report

© 2015 Forrester Research, Inc. Reproduction Prohibited28 Open the spigot with DX platforms Marketing Analytics + Insights Contextualdeliveryat“theglass” Touchpoints

29© 2015 Forrester Research, Inc. Reproduction Prohibited The battle for the future of your customers of technology decision-makers have implemented predictive analytics. Greater than 45% 40% of technology decision-makers plan or are interested to implement predictive analytics. Base: 984 Technology Decision-Makers Source: Forrester’s Business Technographics Global Data And Analytics Survey, 2015

© 2015 Forrester Research, Inc. Reproduction Prohibited30 Analytics Must Drive Actions

© 2015 Forrester Research, Inc. Reproduction Prohibited31 Neither data nor insights are enough to drive great customer experiences.

© 2015 Forrester Research, Inc. Reproduction Prohibited32 Without delivery, insights are wasted Software to manage, deliver, and optimize experiences consistently across every digital touchpoint.

© 2015 Forrester Research, Inc. Reproduction Prohibited33 Learnings Digital insights Link data and action through digital insights and continuous learning All possible data All possible actions Right data Effective actions Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

© 2015 Forrester Research, Inc. Reproduction Prohibited34 Three uses of predictive insights for better DX decisions › Augment human expertise and intelligence Enhance human decision-making with dashboarding Provide context around the prediction to help the user leverage their knowledge and expertise › Automated experiences and actions Deliver contextual, experientially-relevant content using rules driven by predictions Shape customer journeys by directing to next-best-actions › Discovery of new products and services Explore data and predict areas where there are business gaps Prototype new products and services and predict their potential impact based on current offerings

© 2015 Forrester Research, Inc. Reproduction Prohibited35 Source: August 7, 2014, “Closing The Experience Gaps” Forrester report Four customer experience gaps loom Performance Gap Convenience Gap Personalization Gap Trust Gap What businesses deliver What customers expect

© 2015 Forrester Research, Inc. Reproduction Prohibited36 Bridge the valley with predictive analytics Performance: Internet scale, real-time, any device, instrumented for data-driven improvement Convenience: Simple, compelling, complete, unified delivery across channels, can act immediately, anywhere Personalization: Context-rich, next best action, location-aware, socially connected, customer-journey-mindful Trust: Honest, accountable, transparent, contextual, reliable, privacy-respecting What businesses deliver What customers expect  Source: August 7, 2014, “Closing The Experience Gaps” Forrester report

© 2015 Forrester Research, Inc. Reproduction Prohibited37 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited38 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited39 It’s an ecosystem of solutions Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom

© 2015 Forrester Research, Inc. Reproduction Prohibited40 It’s an ecosystem of solutions Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom

© 2015 Forrester Research, Inc. Reproduction Prohibited41 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited42 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited43 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited44 Predictive platforms WCMTesting Recomm- endations Search Campaign Mgmt CommerceCustom It’s an ecosystem of solutions

© 2015 Forrester Research, Inc. Reproduction Prohibited45 Get going with predictive digital experiences › Start with a single customer touchpoint and ask: what information could I predict to make their experience better? › What data is available in the organization to understand our customers and behaviors? › What technology capabilities do we already have to leverage predictions(e.g. can we create offline models to put into existing rules engines)? › Create a shared culture: this challenge is everyone’s problem! (marketers, developers, operations)

forrester.com Thank you Rowan